Saturday 22 September 2001 13.39 EDT
First published on Saturday 22 September 2001 13.39 EDT

There's more than a whiff of change in the air in Budapest. New hotels and clubs are opening, a former machine factory is being converted into an exhibition centre and historic buildings are being restored. But the city is still an intriguing mix of old and new, east and west. It's close enough for a weekend break, yet different enough to give you the pleasure of the unfamiliar. Fashionable young Hungarians may be welded to their mobiles and wear Armani underpants, but they still drive wheezing old Trabants held together with rust.

Hungary's position in the very centre of Europe made it geographically pre-destined to be invaded at regular intervals, and there have been relatively few times in its history when it has been self-governing. A reminder of this relentless turmoil is the silvery weeping willow by the city's synagogue (VIII Dohány utca 2), a memorial to the hundreds of thousands of Hungarian Jews who died in the Holocaust. The walls of some of the buildings nearby are still scarred by bullet holes dating from the German occupation in 1944.

Budapest was once two cities, Buda and Pest, which sat on either side of the Danube, and they still retain their different characters.

Buda has a serene quality, with its imposing buildings perched imperiously on the western bank. Climb up the hill to the terrace of Fisherman's Bastion, a Disney-like confection built at the end of the 19th century and offering some of the best views of the city - especially at night when everything takes on a romantic glow and you can't see how dirty the Danube is.

Not far away is the equestrian statue of András Hadik. He was a commander of Buda Castle in the 18th century, and it is said to be lucky to rub the horse's testicles, which gleam gold from the constant attention.

Pest, the commercial centre on the opposite bank, is younger and livelier than Buda, spreading across a featureless, flat plain. With clubs, cafés, shops and bars (Irish theme pubs are particularly popular), this is where you come if you want some action. Here, you'll find the city's main shopping street, Váci Utca, which tends to be crammed with local people eating burgers (Ronald McDonald is a cultural icon here), and tourists investigating Marks and Spencer to see if the goods are cheaper than at home.

Take a bath

Budapest is full of thermal baths and whatever the complaint, from arthritis to heart problems, there seem to be healing waters to cure it.

Gellért - Gellért Hotel, 1 Szent Gellért tér, Buda. Open October - April, 6am - 3pm; May - September, 6am - 6pm weekdays; 7pm weekends. Admission £3. Housed in an impressive art-nouveau building with marble pillars and brilliant turquoise mosaics, the Gellért is the grandest of them all. The range of treatments on offer is mind boggling and includes a "gingival shower" and a "hygienical massage". You can also choose the safe option of a swim and a sauna.

Széchenyi Baths - 11 állatkerti körút in City Park, on the Pest side. Open 6am - 7pm Mon-Fri, 5pm weekends. Admission £2.50. One of Europe's largest bath complexes, recently refurbished. Locals relax here by sitting in the water playing chess.

Other famous bath houses include the 16th- century Király Baths, Fö utca 82-86, built by the Turkish Pasha of Buda, and the Rudas Baths, Dobrentei tér 9.

See some paintings

Hungarian National Gallery -(Magyar Nemzeti Galéria) 1 Szent György tér 6, wings B, C and D of the Royal Palace (tel: 375 75 33 ext 423). Open 10am-6pm, closed Mon. Admission £1.20. Housed inside the city's grandest building, Buda Castle Palace, it features works by Hungarian artists Viktor Madarasz, Miklos Izsó and the impressionist Jozsef Rippl-Rónai. Come here for scenes of energetic Magyars galloping across the plains, obscure historical figures and landscapes peopled with peasants. But whatever the subject, all the paintings seem tinged with melancholy - the Hungarians call it honfibú , or "patriotic sorrow", an expression of sadness for the fate of their country.

Best of all is the work of the unpronounceable Csontváry Koszta: when Picasso saw his paintings at an exhibition in Paris, he was so struck by them that he asked to be locked in the room with them for an hour.

Visit a museum

Hungarian National Museum - (Nemzeti Múzeum), Muzeum körút 14-16, Pest (tel: 388 21 22). Open 10am-6pm, closed Mon. Admission £1. The recently refurbished Hungarian National Museum is the oldest in the city. Displays take you through 1,000 years of Hungarian history from the days of King Stephen, Hungary's first king, through the years of the Ottoman occupation and into the 20th century.

Gundel - out by the City Park on állatkerti út (tel: 321 3550). Hungary's most famous restaurant, serving goulash ( gulyás ) - the one Hungarian dish that everyone knows - as well as more unusual traditional fare such as meggyleves (sour cherry soup) and paprikás sulloszelet (pike in a paprika sauce). Sunday brunch is the best value at around £10. The building is splendid and dining formal: men have to wear jackets in the evening.

Múzeum, Múzeum -körút 12 (tel: 267 0375). A good choice for lunch, next to the Hungarian National Museum. You can get a main course for around £6.50.

Cosmo - Kristof tér 7-8 (tel: 266 3096). One of the newer, slicker European restaurants. You can eat for around £7.50.

Relax in a coffeehouse

Gerbaud - Vörösmarty tér 7-9. The most famous coffeehouse has kept its grand 19th-century interior. Good squishy cakes and pastries.

Where to stay: Art'Otel, 1 Bem Rakpart (tel: 487 9487, parkplazaww.com) from £100 per double room per night. One of the most stylish hotels. Contemporary artworks on the walls and some great views over the Danube.

Le Meridien, Erzsebet tér 9-10 (tel: 267 4545, lemeriedien-hotels.com) from £110 per double room per night. New but with with period furnishings in the rooms.

Danubius Hotel Gellért, Szt Gellért tér (tel: 385 2200, danubiusgroup.com/gellert) from £75 per night for a double room. For bygone appeal. Guests get free use of the Gellért baths.

By next year there will be another hotel worth trying, the former Gresham Palace near the Danube which is being converted into a five-star hotel.

Getting around: The Budapest Card, available from metro stations, tourists information offices and hotels, is the best way to make the most of the city. It costs £8 for 48 hours, £9.50 for 72 hours and offers unlimited travel on public transport; free entry to 60 museums and some sights, and discounts in restaurants and spas.